The Mortgage Electronic Registration Systems, or MERS, failed to obtain court approval to move a Dallas County lawsuit filed against the mortgage registry to an Arizona federal court for pooling with other MERS-related cases.
MERS, which is tied to parent company Merscorp, filed an action with the United States Panel on Multidistrict Litigation in an attempt to have Dallas County's case against MERS, as well as the Montgomery County case out of Pennsylvania, pooled with other MERS-related lawsuits in an Arizona federal court.
The cases involve the counties' attempts to sue MERS for filing fees on mortgages that the jurisdictions claim they were deprived of through MERS model of assigning mortgages electronically.
The multidistrict litigation panel is created to determine whether civil actions in federal court have enough commonalities to be pooled into one proceeding to prevent conflicting opinions across federal jurisdictions.
The court ruled against MERS, finding that the Dallas and Montgomery cases were the first to deal with counties suing MERS, making them inconsistent with other pooled cases in which the plaintiffs were homeowners.
MERS considers the ruling neither a loss nor a gain.
"Without going into our litigation strategy, our petition was basically a question of which federal court the case will be heard in," said Janis Smith, vice president of communications for MERS. "This is really not an adverse decision or a big deal for us. We were able to successfully remove the case to federal court in Texas where there are numerous decisions in favor of MERS, so it will be heard there, not in the Arizona federal court."